What is Pricing Strategy?

This video details pricing strategy and how it fits into a firm's overall marketing strategy.
This video is helpful for anyone attempting to understand the basics of the pricing side of marketing, including marketing undergraduate students, undergraduate business students, marketing graduate students, high school students studying business, or someone looking to start their own business.
Specifically, this will help an individual understand what goes into pricing your product by examining different pricing strategies.
This video is classified under pricing strategies in marketing.
If you like this video, be sure to check out our other strategy videos, hit like, and subscribe!
0:00 Introduction
0:06 What is pricing strategy and why does a firm need it?
0:32 Key Concept Applicable to Any Pricing Strategy
3:29 Competition-Based Pricing Strategy
9:56 Customer-Oriented Pricing Strategies (Cont.)
19:37 Cost-Plus Pricing Strategy Concept
20:07 Cost-Plus Pricing formulas
22:10 Cost-Plus Pricing Example
22:57 Pros and cons of cost-plus pricing

[@yohannesshewarega5639]

Thanks

[@dcj7368]

What does the 1 represent in the formula for cost plus formula?. On the internet i cant find this specific formula for cost plus method

[@weilaiyvn]

100%
As example, if you multiply US$ 50.00 by 0.5 alone, you will end up with only US$ 25.00 an not 75, because in reality 0.5 is 50%. You are subtracting half of the price, and not increasing it by its half.
You want to receive 100% of the cost of production + 50% of markup
So, to get this +50% of markup above the actual 100% of production cost, you need multiply US$ 50 by 1.5 (wich means 150% _ 100% to maintain the production price and 50% to add the markup price_)
The formula used is the rule of three, but in the video is used its simplified version inside that greater formula.
_ The complete formula:
100/150 = 50/X
or, to you understand each value: 100%/150% = US$50/US$ X
_ The simplified formula:
50*1.5
Search more about the rule of three to understand how it works, its extremely simple.